Experiences are better than material items

If it’s better to give than to receive, U of T Scarborough research shows that it’s better to give an experience than a thing.

New research by Cindy Chan, an assistant professor in U of T Scarborough’s Department of Management and the Rotman School of Management, finds experiential gifts are more effective than material gifts at improving relationships from the recipient’s perspective.

“The reason experiential gifts are more socially connecting is that they tend to be more emotionally evocative,” says Chan, an expert on consumer relationships.

“An experiential gift elicits a strong emotional response when a recipient consumes it — like the fear and awe of a safari adventure, the excitement of a rock concert or the calmness of a spa — and is more intensely emotional than a material possession.”

The research, co-authored with Cassie Mogilner, an associate professor at the UCLA Anderson School of Management is published online in the Journal of Consumer Research and looks at how relationships between a gift giver and recipient were affected across four separate studies.

While past research has focused mostly on how much recipients enjoy certain gifts, this research is unique in that it explores the pro-social consequences of gift consumption, that is, how effective gifts are in building relationships.

“Often the focus is only on whether someone likes a gift rather than focusing on a fundamental objective of gift giving, and that is fostering relationships between giver and recipient,” she says.

Chan says exploring the effectiveness of gift-giving is important because households spend approximately two per cent of their annual income on buying gifts, and that gifts are also important opportunities to nurture relationships. Yet, according to their research, 78 per cent of respondents reported most recently buying material gifts rather than an experience.

Those considering material gifts can also highlight the experience it provides, notes Chan. Giving a friend a CD of music that reminds them of a concert enjoyed together can mimic the same effect as the experience of the concert itself.

In one of the studies, Chan found that emotionally evocative gifts can also strengthen relationships. Emotional material gifts like a joke-of-the-day calendar, a framed photo or jewelry engraved with a loving message can be very effective gifts in that regard.

So what advice does she have for gift buyers and marketers ahead of the holiday season?

“Consider someone’s favourite hobby or something new they’ve always wanted to do. Marketers should also package experiential gifts in a way that makes it easier for recipients to consume them so they don’t have to be tied to using the gifts by a particular day or time,” she says.

The research also fits into a broader body of research that suggests using discretionary spending for experiences rather than more material possessions. Chan points to honeymoon registries that allow people to buy a dinner, scuba lessons or chipping in on airfare as prime examples.

“People often struggle with the challenge of choosing what to give someone. If you want to give them something that will make them feel closer to you, give an experience.”